Earlier this month, Albertsons and Kroger announced a nearly $25 billion merger agreement that some labor advocates say could give the companies too much power. Their subsidiaries include common brands like King Soopers, Safeway, Fred Meyer and Smith’s Food and Drug.
A union representing workers at both Kroger and Albertsons locations in Colorado and Wyoming, United Food and Commercial Workers Local 7, called the announcement “devastating” in a recent press release. General council for the union Matt Shechter said he’s been getting calls from members worried about store consolidation, layoffs and rising food prices.
“They're afraid. They don't know what's going to happen. Nobody's telling them anything,” he said. “You have managers out there in the stores saying, ‘Oh, don't worry, nothing's gonna happen. Nothing’s going to happen.’ And they don't know that.”
In several towns in the Mountain West, Shechter said the only two traditional grocers in town are a Kroger and Albertsons chain. Acknowledging this overlap in their merger announcement, the companies said they’ll be creating a spin-off company with between 100 and 375 stores.
In a previous merger between Albertsons and Safeway, the company divested from 168 locations in an effort to keep up competition. A regional grocer in Washington State agreed to buy the majority of those stores, but went bankrupt quickly because it was unequipped to handle the sudden spike in business. The chain blamed Albertsons for the situation, and Shechter said many union members lost jobs in Colorado.
“The loss of that competition means higher food prices for consumers. It means fewer employment opportunities in those towns,” Shechter said.
The International Teamsters Union, which has about 18,000 employees at both companies, said this is an example of why antitrust reform is needed. Some politicians, including prominent U.S. Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) are already opposing the merger.
“There are a lot of unanswered questions that need to be addressed. Our concerns are shared among workers, customers, elected officials, shareholders, consumer advocates, and the general public,” said Teamsters General President Sean O’Brien in a statement.
Neither Albertsons or Kroger responded to requests for comment, but they’ve said to other outlets that the deal would secure union jobs and increase wages.
“Importantly, the merger secures union jobs and we will continue to work with local unions across America to serve our communities,” Kroger CEO Rodney McMullen said in the merger announcement. “We look forward to bringing the Albertsons Cos. and Kroger families together to create new and exciting career opportunities for associates.”
Some unions in other states are also being less critical against the deal. A union leader in Oregon said “we need more information” in an interview with Boise State Public Radio earlier this week.
The merger is scheduled to go through in 2024 but will face a U.S. senate hearing next month and potential litigation. The deal would give the combined company the second-largest grocery market share in the United States, behind Walmart.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
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